All Hail Better-Than-Predicted BetMGM
It may be a stretch to call it a “Hail Mary” but given the billions spent on it by joint stockholders Entain and MGM Resorts, the launch of sportsbook BetMGM must surely be one of the highest, and riskiest, gambling punts in iGaming history.
Now, with the news that BetMGM’s net revenue hit US$1.44 billion (£1.16bn/€1.32) in 2022–surpassing financial targets–, it looks as if the bold gambit has paid off.
“[Our] talented team continues to execute our plan with purpose, passion, and discipline,” said BetMGM Chief Executive Adam Greenblatt. “2022 was a year in which we delivered against many key strategic initiatives and achieved several company milestones.”
The sportsbook, formally launched in 2019, is now “confident” that it will reach the magic US$2 billion (£1.61bn/€1.84bn) net revenue mark this year, 2023. 2022 net revenue was way up from initial US$1.3 billion guidance (£1.05bn/€1.19bn).
And although the online outfit is forecasting an EBITDA loss of approximately US$440 million (£355.72m/€404.98m) for the year just gone, crucially, it’s expecting to be EBITDA-positive by this upcoming H2.
BetMGM’s better-than-predicted revenue was down to a number of key factors, the company said in a statement.
Performance was boosted by product improvements, superior customer experience, a more data-focused marketing strategy and the roll-out of an innovative GameSense responsible gambling programme.
Nevertheless, BetMGM is competing against similarly well-financed and tuned-in rivals in arguably the toughest gambling market in the world – North American sports betting.
With the long term “acquisition” cost per player estimated to be an astonishing US$250 (£202/€230), Entain and MGM, concurrently, have invested around US$1.25 billion in their joint brand since conception and inception.
Competing against the likes of DraftKings and current market leader FanDuel, BetMGM is now live in 24 US states and Ontario, Canada.
It has an overall 13 percent share of the North American online sports betting market – and around 30 percent of the greater iGaming commercial space.
Will it make Number One?
On form like this, it’s only a matter of time.